Which of the following statements is/are correct with reference to the regulatory framework for the non-banking finance companies’ (NBFC) by RBI?

Answer & Explanation

Option: Both A & B

Explanation:

The Reserve Bank of India (RBI) has suggested a tougher regulatory framework for the non-banking finance companies’ (NBFC) sector to prevent recurrence of any systemic risk to the country’s financial system. The regulatory and supervisory framework of NBFCs will be based on a four-layered structure — the base layer (NBFC-BL), middle layer (NBFC-ML), upper layer (NBFC-UL) and the top layer. The current threshold for systemic importance, which is ₹500 crore now, is proposed to be revised to ₹1,000 crore.